Building brands in a changing society

The New Brand Architecture

A brand needs to differentiate an offering from the competition, develop a meaningful relationship with consumers, and now, it’s expected to be the public face of a company’s sustainability strategy.

Of course, long before the term sustainability became part of the vernacular, a brand was already expected to shoulder broad responsibilities.

If a brand is to embody a company’s promise to consumers, said Dr. Philip Kotler in Kellogg on Branding, then the brand must become “the whole platform for planning, designing, and delivering superior value to the company’s target customers.”

For consumers, a brand is both the lens through which they view a company, product or service and a symbol of their entire purchase and consumption experience, whether positive or negative.

This makes a strong brand into a precious intangible asset for a corporation, as noted by Dr. Thomas Deigendesch of Interbrand.

In building loyalty and boosting demand, said Dr. Deigendesch, a brand contributes to shareholder value and reduces the risk to future earnings. If Coca-Cola, IBM and Microsoft were 2010’s strongest three brands, according to Interbrand’s Best Global Brands study, the market expects they will continue generating value in 2011 and beyond.

Enter today’s concerns about corporations taking responsibility for the environmental, social and economic outcomes of doing business.

As noted by Landor’s 2011 Trends Forecast, companies are increasingly held accountable by consumers and other stakeholders for a growing list of issues: how they operate, where product inputs are sourced, how products are made, and how employees and constituent communities are treated.

And it’s not just consumers who care about private sector accountability. Executives also appreciate that corporate reputations are impacted, for good or ill, by how a company manages its carbon emissions or the conduct of its suppliers.

Almost three-quarters of executives (72%) consider sustainability to be “extremely” or “very important” for managing corporate reputation and brands, according to a 2010 Global Survey by McKinsey. Further, a survey of global thought leaders by SustainAbility found that almost nine in ten believe that improving sustainability performance leads to a stronger brand.

Since a strong brand is a cornerstone of corporate health, brand stewards should be thinking hard about which environmental and social issues are most relevant to their category. Brands that initiate sustainability strategies will be rewarded with a buying public that is increasingly knowledgeable about global issues.

2 Responses to “The New Brand Architecture”

Very interesting post Stephanie.
I couldn’t agree more that brands need to develop a meaningful relationship with consumers. In a world of instant social media communications, managing a brand successfully can only be achieved by nourishing this relationship and building trust by adopting open and transparent communications that proactively disclose both achievements and challenges…and adopting transparent communications will only be acceptable for corporations that have assessed their internal and external environmental and social issues and are committed to take steps to address their shortcomings.